Texas State Sen. Carlos Uresti (D-San Antonio) and two others have been indicted for an alleged Ponzi scheme to market sand for hydraulic fracturing (fracking).
The indictment alleges that the defendants also made false statements and representations to solicit investors in Four Winds Logistics, a purported frack sand supplier. The defendants allegedly used funds from more recent investors to pay earlier investors and for personal expenses, according to the U.S. Attorney’s Office for the Western District of Texas.
Uresti along with Four Winds CEO Stanley P. Bates of San Antonio, and Four Winds consultant Gary L. Cain of San Antonio were charged with one count of conspiracy to commit wire fraud and one count of conspiracy to commit money laundering.
The indictment also charges Uresti with five substantive counts of wire fraud; two counts of securities fraud; one count of engaging in monetary transactions with property derived from specified unlawful activity; and one count of being an unregistered securities broker.
The indictment also charges Bates with one count of wire fraud, two counts of securities fraud and three counts of engaging in monetary transactions with property derived from specified unlawful activity. Cain is also charged with seven counts of engaging in monetary transactions with property derived from specified unlawful activity.
Each fraud charge carries a potential sentence of up to 20 years; each money laundering charge could lead to up to 10 years. Uresti faces up to 20 years in federal prison if convicted of being an unregistered securities broker.
A separate indictment charges Uresti and Vernon C. Farthing III of Lubbock, TX, with one count of conspiracy to commit bribery and one count of conspiracy to commit money laundering.
The indictment alleges that from January 2006 to September 2016, the defendants conspired with others to pay and accept bribes in order to secure a Reeves County Correctional Center medical services contract for Farthing’s company. The indictment specifically alleges that Farthing paid Uresti $10,000 a month as a marketing consultant and that half of that sum was then given to a Reeves County, TX, official for his support and vote to award the contract to Farthing’s company.